I hit the invisible stone, why is there oil coming out of the exaust?. ?

When you say the smoke was much heavier I take it there may have been some to start with.
Two things come to mind.
1/ After hitting the stone did you have the mower turned on its side? In some instances when doing this it is possible for oil from the crankcase to enter the cylinder. If this is the case any oil not burnt in combustion (smoke) will be blown out of the exhaust. This should clear after a while in normal use.
2/ Did you check for worn valve guides when the engine was apart?
The drive problem may be a broken pin/key in the drive itself caused by the jolt of hitting the stone and not related to the engine.
I hope this is of help

Robin S
August 2008